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Prosecutors ignored the ex-FirstEnergy CEO’s statement, leaving criminal charges pending
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Prosecutors ignored the ex-FirstEnergy CEO’s statement, leaving criminal charges pending

COLUMBUS, Ohio – Prosecutors have acted to investigate a threatening statement from a former top FirstEnergy Corp. official. to clamp down, indicating they are considering new charges in a long-dormant bribery investigation.

Eileen Mikkelsen, the company’s former vice president of rates and regulatory affairs, will testify under oath in a regulatory investigation early next month, one of seven since-ousted company officials subpoenaed in the case before the Public Utilities Commission of Ohio. But Ohio Deputy Attorney General Carol O’Brien asked regulators to back off, warning that the declaration could grant her immunity, preventing prosecutors from charging her with crimes.

“We have reservations about granting automatic immunity to Ms. Mikkelson (sic),” O’Brien wrote. “We ask that she not be forced to testify to prevent legal immunity from triggering.”

State law requires witnesses subpoenaed by the PUCO to testify even if their answers are self-incriminating. But conversely, prosecutors cannot charge them for “any transaction or matter about which he testified.”

A spokeswoman for Attorney General Dave Yost declined to comment on the filing. Cleveland.com and The Plain Dealer contacted an attorney for Mikkelsen.

If prosecutors were to file charges, Mikkelsen would be the ninth person (and the third former FirstEnergy employee) to be criminally charged in what prosecutors have called the largest bribery case in state history.

FirstEnergy “separated” Mikkelsen in 2021 over what it described to the U.S. Securities and Exchange Commission as “its inaction regarding the 2015 amendment to a previously disclosed purported consulting agreement” with Sam Randazzo, who was appointed by Governor Mike DeWine in 2019 as chairman of the Public Utilities Commission of Ohio.

A company solely owned by Randazzo received more than $22 million from FirstEnergy between 2010 and his appointment in February 2019 as head of the regulatory agency responsible for regulating energy companies like FirstEnergy.

FirstEnergy has admitted that its former executives – CEO Chuck Jones and senior vice president of external affairs Mike Dowling – paid Randazzo a $4.3 million bribe in January 2019 in exchange for preferential rulings in regulatory matters and lobbying help in support of a bailout for the company’s nuclear power plants. Prosecutors have charged all three men with dozens of counts of bribery. Jones and Dowling are awaiting trial, while Randazzo committed suicide in April while facing both state and federal charges.

Jones and Dowling, who have pleaded not guilty, say the money was not a bribe but a termination fee for their 2015 consulting contract with Randazzo. In exchange for the money from the consulting contract, Randazzo, who represented a group of large and influential industrial companies that purchased energy in bulk, agreed not to oppose FirstEnergy’s rate case before the PUCO.

The company is now cooperating with state and federal prosecutors. Current lawyers say the company had no legal obligation to pay Randazzo the $4.3 million, but Jones and Dowling did so anyway.

A jury in March 2023 convicted ex-Ohio House Speaker Larry Householder of taking tens of millions in bribes, enriching him both personally and politically, in exchange for his work driving a $1 bailout .3 billion that would exclusively benefit FirstEnergy. Prosecutors say Jones and Dowling devised a scheme to discreetly pay both Householder and Randazzo to carry out the company’s bidding from within.

Mikkelsen’s precise role in Randazzo’s 2015 contract is unclear. In a 2016 filing with the PUCO, FirstEnergy — with Mikkelsen listed as a witness — wrote that it had entered into “no contracts and/or agreements” at the time regarding its PUCO rate case (technically known as an “electrical security plan”).

Texts and emails released through the ongoing criminal, civil and regulatory investigation into the matter show that Mikkelsen helped broker the 2015 contract. For example, in March 2015, another company executive sent her an email from Randazzo with the topic “CONFIDENTIAL Settlement Discussions,” which detailed issues surrounding FirstEnergy’s electrical security plan. In November that year, Dowling texted her to say that “Sam agrees to the deal” and told her some terms.

“Great,” she replied, and was later told that in return Randazzo had submitted the agreed-upon letter without opposition.

In February 2020, corporate lobbyist Justin Biltz texted Mikkelsen to tell her that “Mike spoke with Sam Randazzo today” about FirstEnergy’s previously scheduled 2024 rate review, which company officials believed would force them to cut costs for customers. Biltz told Mikkelsen that “Sam threw out some ideas” that they should learn more about.

“Thank you. I am in the office and looking forward to the discussion,” Mikkelsen wrote back.

A ruling by Randazzo ultimately put an end to the interest rate review, leading to celebration within the company and a jump in its share price. Prosecutors have seen this as one of the key elements of the Randazzo bribery.

FirstEnergy did not report Mikkelsen’s annual salary in its annual financial reports, but SEC filings show she directly owned more than $740,000 worth of stock as of March 2019.

Sources told Cleveland.com and The Plain Dealer that they believe the office of U.S. Attorney for the Southern District of Ohio Ken Parker has completed its investigation, although Parker has denied this and said an investigation is ongoing. But prosecutors’ interest underlines that the prosecution continues even six years after FirstEnergy paid Randazzo the alleged bribes.

At Parker’s urging, the PUCO froze its investigation into FirstEnergy’s political operations for 18 months. The Ohio Consumers’ Counsel, a state agency that represents the interests of taxpayers, recently began a series of seven long-sought interviews with former FirstEnergy attorneys and lobbyists.

However, the first two lobbyists – Joel Bailey and Biltz – refused to testify. State law requires anyone subpoenaed by the PUCO to testify, even if the answers may be incriminating. In return, those who testify cannot be sued in a state case. But attorneys for both men said that would not protect them from federal prosecution. A PUCO judge will decide whether the Fifth Amendment claims are legitimate. An attorney for Ty Pine, another former lobbyist, indicated that he too would refuse to answer questions.

Maureen Willis, who heads consumer advocacy, said Mikkelsen’s statement will be withdrawn. While the prosecutor blocked the nuclear bailout, she emphasized that Ohioans are still paying for a separate coal bailout that was tied to HB6 as a political concession.

“Justice continues to unfold in the ongoing House Bill 6 scandal. While we seek answers for FirstEnergy’s energy consumers, we will not interfere with the state’s criminal investigation,” she said. “We continue to push for justice for all Ohioans by repealing the $500,000 per day coal subsidies that consumers continue to pay under the tainted House Bill 6.”

The recent statements, made public in an unusual twist, also threaten FirstEnergy’s former vice president Dennis Chack, CEO Steven Strah, and senior vice president and chief legal officer Robert Reffner.

The householder is currently serving a 20-year prison sentence. He was convicted along with Matt Borges, a lobbyist (and former chairman of the Republican Party of Ohio) hired by the company, who was sentenced to five years. Two conspirators – political operative Jeff Longstreth and lobbyist Juan Cespedes – pleaded guilty and testified against Borges and Householder. Neither man has been convicted in the nearly two years since they testified, raising questions about whether they are being held in reserve for another case.

Lobbyist Neil Clark was also accused of participating in the scheme. He died by suicide before the 2021 trial.

Summit County Common Pleas Judge Susan Baker Ross has not yet set a trial date for Jones and Dowling.

Jake Zuckerman covers state politics and policy for Cleveland.com and The Plain Dealer.